Every week I’ll provide updates on the latest trends in cloud software companies. Follow along to stay up to date! Azure (Microsoft) Quarter The week the first of the cloud giants reported - Azure. Their results were quite interesting. Q4 ‘22 (I’m talking about calendar quarters here, not their fiscal quarters), came in at 38% growth YoY in constant currency. This was quite a bit ahead of expectations. Their guide was for 37% growth, but all the commentary they had made since last quarter was quite negative on the optimization environment, so expectations for the quarter were more like 35% growth, and bears were calling for closer to 33%. Needless to say, 38% growth was significantly stronger than anyone expected. The initial report sent Microsoft shares up 5% after hours. However, during the earnings call the CFO painted a different picture. While the overall quarter (October - December) was great, things started to turn in December. She called out an exit growth rate of December as “mid 30’s”, and then said they expect Q1 ‘23 (Calendar Quarter) to decelerate “4-5%” from where they exited December. So call it 30-31% growth in Q1. Given the beat in Q4, a guide of 30-31% growth in Q1 was a big disappointment. Consensus for Q1 prior to this quarter was ~33%. Given the beat in Q4, in a normal environment you’d expect that beat to flow through to Q1. The beat on this quarter coupled with the miss on the guide really points to a tricky demand environment. And if things are tough for Microsoft (a behemoth who benefits from the bundling effect going on given macro), it’s most likely tough for everyone. This quote sums up the quarter: “Just as we saw customers accelerate their digital spend during the pandemic, we are now seeing them optimize that spend. Also, organizations are exercising caution given the macro uncertainty.” Wrapping it all up, shares of Microsoft ended down after hours after starting up 5%.
Riddle these long-term assumptions implied by Zscaler's current revenue multiple, and put your own odds for these long-term assumptions could change in future years, changing the revenue multiple in future years: https://feed.bulletpoint.network/tiles/1663247300379
Let me know if you'd like to use this SaaS to do that for any other SaaS company on your list, providing more context to all these multiples than the past alone provides.
Riddle these long-term assumptions implied by Zscaler's current revenue multiple, and put your own odds for these long-term assumptions could change in future years, changing the revenue multiple in future years: https://feed.bulletpoint.network/tiles/1663247300379
Let me know if you'd like to use this SaaS to do that for any other SaaS company on your list, providing more context to all these multiples than the past alone provides.